EABC STUDY REVEALS THE EASE OF DOING BUSINESS IN THE EAST AFRICAN COMMUNITY RATE AS MODERATE

Saturday 9^th September 2023, Arusha, Tanzania – The East African Business Council (EABC), through the support of GIZ via the ‘Support to East African Integration’ (SEAMPEC II) Programme, conducted a comprehensive study to assess the status of doing business in the EAC region.

The study gathered responses from 252 businesses across all the EAC Partner States, offering valuable insights into the region’s commercial landscape.

The ease of doing business within the region was ranked on a scale from 1 – Very Easy to 5 – Very Hard. The ease of doing business was measured using eight indicators.

According to the study, the perceived ease of doing business within the EAC region was ranked as “Moderate” (Rank 3.09), with all eight indicators receiving similar moderate rankings.

Key Findings:

Indicator Rankings

• The eight indicators were ranked as follows:

• • Paying taxes (Rank 3.21)
  • Regulations for starting and operating a business (Rank 2.66)
  • Government operations (Rank 3.41)
  • Infrastructure development (Rank 2.76)
  • Trading across borders (Rank 3.12)
  • Making cross-border payments (Rank 2.73)
  • Removal of trade restrictions (Rank 3.37)
  • Trade finance (Rank 3.46)
• Positive Progress: The study revealed that companies perceived positive progress in starting and operating a business and the ease of money remittance across the region. Businesses also cited various initiatives that have eased doing business in the region, including government reforms, business-friendly laws, political and economic stability, and government collaboration with the private sector through Public-Private Partnerships (PPPs).
• Challenges Identified: Businesses identified several challenges to the ease of doing business in the EAC, including trade finance issues such as foreign currency availability, affordability of interest rates, and access to loans. Government operations, especially those related to payments, securing tenders, and tax-related matters, were also highlighted as problematic. Trade restrictions, trading across borders, and high trading costs also pose significant challenges.

To enhance the ease of doing business in the region, the study recommends that EAC Partner States:

1. Enhance border efficiency to facilitate trade processes for goods and people
2. Expedite the implementation of EAC commitments, such as the Single Customs Territory (SCT), EAC Common External Tariff (CET), and Common Market commitments
3. Invest further in infrastructure, especially transport and communications networks
4. Address language barriers by translating official documents into French
5. Establish sector-specific Public-Private Dialogues (PPDs) to effectively address trade and investment constraints.

These findings provide a valuable resource for policymakers, businesses, and stakeholders in the EAC, guiding efforts to improve the business environment and foster economic growth in the region.